Welltower Inc. WELL boasts a diversified portfolio of healthcare real estate assets in the key markets of the United States, Canada and the United Kingdom. The favorable senior housing industry, capital-recycling efforts and a healthy balance sheet are likely to continue aiding the company to ride the growth curve.

Recently, this Toledo, OH-based healthcare real estate investment trust (REIT) announced that it is under contract to acquire the Canada-based senior housing portfolio of Amica Senior Lifestyles from Ontario Teachers' Pension Plan for an aggregate consideration of C$4.6 billion. The deal, subject to customary regulatory approvals, is expected to close in the fourth quarter of 2025..

Analysts seem bullish on this Zacks Rank #2 (Buy) company. The Zacks Consensus Estimate for WELL’s 2025 FFO per share has moved 1.9% northward over the past month to $4.88.

Shares of this company have gained 22.8% in the past six months against the industry’s 4.2% decline.

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Factors That Make Welltower a Solid Pick

Favorable SHO Portfolio Dynamics: Given an aging population and an expected rise in senior citizens’ healthcare expenditure, Welltower’s seniors’ housing operating (SHO) portfolio is well-poised to capitalize on this positive trend.

With a supply-demand imbalance, the portfolio is expected to experience sustained occupancy growth in 2025 and the coming years. Capitalizing on these positive aspects, Welltower’s SHO portfolio is well-prepared for compelling multiyear revenue growth.

In the fourth quarter of 2024, SHO portfolio same-store net operating income (NOI) grew 23.9%. This represents the ninth consecutive quarter in which growth has exceeded 20%. Management anticipates SHO portfolio to deliver solid same-store NOI growth in 2025, with sustained levels of outsized growth expected in future years.

Favorable OM Visit Trend: There has been a favorable outpatient visit trend compared with in-patient admissions. Banking on this, the company is optimizing its outpatient medical (OM) portfolio, growing relationships with health system partners and deploying capital in strategic acquisitions.

Given the favorable secular trends and growing need for value-based care, the company’s efforts to strengthen its OM footprint will boost long-term growth.

Capital-Recycling Efforts: WELL’s capital-recycling efforts to finance near-term investment and development opportunities highlight its prudent capital management practices and pave the way for long-term growth.

In the fourth quarter of 2024, the company completed pro-rata gross investments of $2.4 billion. This included $2.2 billion in acquisitions and loan funding and $233 million in development funding. During this period, pro rata property dispositions and loan repayments totaled $464 million. As of Dec. 31, 2024, six SHO properties and one triple-net property were classified as held for sale.

Balance Sheet Strength: Welltower maintains a healthy balance sheet position. As of Dec. 31, 2024, it had $8.7 billion of available liquidity. The company enjoys investment-grade credit ratings of BBB+ and Baa1 with Positive Outlook from S&P Global Ratings and Moody’s, respectively, rendering it access to the debt market at favorable rates.

With a well-laddered debt maturity schedule and enough financial flexibility, Welltower is likely to meet its near-term obligations and fund its development pipeline.

Other Stocks to Consider

Some other top-ranked stocks from the broader REIT sector are Ventas VTR and Sabra Healthcare REIT SBRA, each carrying a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Ventas’ 2025 FFO per share is pegged at $3.40, which indicates year-over-year growth of 6.6%.

The Zacks Consensus Estimate for Sabra’s full-year FFO per share is $1.49, which indicates an increase of 3.5% from the year-ago period.

Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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